The Institution of Surveyors Victoria has weighed in on the $2.86 billion privatisation of the state’s land registry, a move that has brought a chorus of criticism of the Andrews government ahead of a November election.

The land titling and registration functions of Land Use Victoria were sold off to a new entity owned entirely by First State Superannuation late last month.

The action drew fire from the opposition, who had launched an inquiry into the sale soon after it was first proposed, and in the context of comments from Premier Daniel Andrews on privatisation having ‘failed’ constituents in regard to electricity prices.

Data security concerns have been voiced by a number of different interest groups, along with concerns about price hikes, which the Victorian government has stated will be capped at the CPI.

The Office of the Surveyor General and a host of Land Use Victoria’s key functions will remain under state control, raising questions about interactions between these bodies and the newly-privatised registry.

The Institution of Surveyors Victoria and the Surveying and Spatial Sciences Institute of Victoria have provided detailed statements on the controversial sale to Spatial Source, which we publish below.

The Institution of Surveyors Victoria

‘We are pleased at Government’s decision to retain the statutory functions associated with registration in public hands as well as the Subdivision Branch, Application Branch and the Office of Surveyor-General.

Whilst the title boundary system is to remain under public control, this system is highly integrated with the registration system that is being commercialised.

The title boundary system, which licensed surveyors maintain in partnership with the Registrar of Titles and Surveyor-General, is the physical representation of the extent of property title ownership that the state guarantees.

The quality of the relationships and the trust between these partners is a key factor in providing security to transact in good faith, with reasonable certainty and low risk of potential system failure.

Some senior members of the public service appear to be of the view that registration is an administrative function, which does not impact the cadastre.

However, we maintain our view that registration is a lot more than just an administrative function, and that the long-established processes, policies, legal precedence and most importantly the shared expertise across the partnership are what provide efficiency, integrity and community confidence to the registration process and the cadastre.

Therefore, we will continue to seek constructive relationships and partnerships with Government in relation to this commercialisation and the future of Land Use Victoria, and continue to represent the interests of our members and those of the Victorian community to ensure that industry and the general public continue to have confidence in Victoria’s land title system.’

Surveying and Spatial Sciences Institute of Victoria

‘SSSI does not seek to take a position on the changes to the machinery of government, but on the overriding issues relating to public interest and the security and integrity of data being held by Land Registry, which underpins the whole property sector. We still have some concerns requiring clarification on the risks involved in the proposed leasing of other conveyancing functions and understanding the details of the proposed commercial operating models, their economic justification and anticipated public benefits.

By focusing on a short term cash windfall without these safeguards, there can be a lack of understanding and taking for granted a system that has successfully underpinned a stable and reliable land tenure system and property market for over 150 years.

SSSI has been following the commercialisation of land registries since the then Victorian Liberal Government included it in their election platform in 2014 as well as the two unsuccessful privatisation attempts that were proposed in the UK during 2016.

Some of our concerns include:

Who will be ultimately accountable for the quality of service delivery and cost? Effective and robust mechanisms will be needed to be built into the performance requirements of the commercial entity to ensure public confidence in the land titles system is maintained.

Is the primary obligation of the commercialised entity to act in the interests of its shareholders or an obligation to act in the interests of the people of Victoria?

The state will retain full control over prices for statutory land registry services and price increases will be capped at CPI for non-statutory services provided by Victorian Land Registry Services. Since privatisation in NSW, some fees have been trebled by commercial operators.

The Registrar of Titles will remain under state control, overseeing the private operator and the state will retain ownership of all registry data, which will be required to be stored in Australia. The Registrar’s statutory function to maintain the integrity and security of the register remains unchanged.

There is a need to ensure the retention of properly qualified, trained and experienced staff in the operation of the system.  The government must ensure that an appropriate level of education is achieved by staff transferring to the private entity and that this is ongoing.

After the lease period expires, the government will be lacking in resources to immediately step in. Should there be early termination or system failure, there is a need for government to identify critical safeguards to ensure continued compliance, should it be necessary for government to resume the transactions.

Success factors include the existence of licensed professionals and the role of their respective professional bodies in shaping effective stakeholder engagement during the partnership and the strong leadership of the government in times of crisis.

It is important to highlight that the driver for the few successful examples of commercialisation overseas has been the prior financial limitation of the public sector to upgrade and operate their existing land registry, which is not clearly the case in Victoria.’

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